Bain pledges controversial R164m from SARS to serve SA

Global consultancy Bain & Company said it will set aside the R164m it received as fees from SARS through a controversial tender, to better serve South Africa.

According to a statement issued by the firm on Sunday afternoon, the independent investigation by law firm Baker McKenzie which was commissioned last week to look into the processes of Bain getting and accepting the work, has already started to yield findings. One of these being that the engagement between Bain and the tax agency fell short of its “operating principles” as that it did not achieve sustainable, positive results for SARS.

“We do not want to benefit from work that was used to further a different agenda than was intended. Bain & Company’s global board today approved to set aside all of the R164M of fees plus VAT and interest, from our work with SARS,” the statement read.

“This money will be used either as prescribed by the Nugent Commission of Inquiry or – in the absence of such prescription - for the benefit of South Africa.” Bain will seek guidance from business, government and civil society on how the funds can best be used, in the latter instance.

Questions were raised during the Nugent Inquiry in late August about the tender processes SARS followed in appointing Bain to develop a restructuring plan for the tax agency, Fin24 previously reported.

Bain's contract with SARS was extended twice without conducting a request for proposal, which is in violation of procurement process, the commission heard.

The restructuring at SARS has also been called into question by witnesses of the inquiry, one being Judge Dennis Davis who told the commission that he did not see the need for the restructure.

Bain said in the statement that it would continue to work with the Nugent Commission. Further, Bain’s managing partner Vittorio Massone who told the commission that he did not feel that he should apologise to SA tax payers will step down from his role. He will focus on cooperating with the commission. Partner Tiaan Moolman will run SA operations in the interim.

Bain has also established an oversight committee made of senior global parties to reinforce the independence of the investigation underway. Athol Williams, a Bain alumnus, will chair the committee on an interim basis.

*UPDATE: This article was updated on Monday September 10, 2018 at 08:45 to reflect that Massone will only be stepping down from his position as managing partner.